Matter/Anti-Matter

Trendwatching gets it right (again): "Giving is the new taking, and sharing is the new giving." That's the key assertion in this month's trend briefing, which describes the characteristics of Generation G (for generosity) and offers eight ways for brands to join: from Tryvertising to Brand Butlers to Random Acts of Kindness (RAK).... Read more

By Robert Fabricant, frog design

I just got back from Vancouver IxDA. Had a great time but seem to have kicked up a bit of a controversy by declaring that, as interaction designers, our medium is not technology – it's behavior. I must admit to a certain amount of surprise at the strong response, and I appreciate the immediate back up from my cohort, Jon Kolko (you can see my slides - mostly visuals - here). It is very interesting to me that this statement would seem controversial, even novel in this community. And I think it says a lot about the state of our discipline.

There is universal acceptance of a holistic approach to human centered design within this community – generally referred to as 'experience design' (not my preferred term). This approach considers all of the contexts surrounding use and then tries to build a unified interaction model to support user needs over time, across these contexts. It focuses not just on expressed needs but on those that are unexpressed: the emotions, motivations, and desires that shape user engagement over time. In fact, more and more of our clients are looking for our help in identifying these latent, unmet needs. So, it is interesting to find designers who are very comfortable, in fact insistent, on this holistic approach and yet spooked by the idea that we are in the 'behavior business'.

It strikes me that this issue may be at the core of why we don't always get the respect we feel like we deserve in the business community. It is confusing to them: here we are pushing the value of ethno, design research, and consumer insights, and yet we don't really have a solid behavioral model to plug our insights into. Maybe we would spend less time trying to explain the business value of what we do if we made this model a much more explicit part of our approach and took some more responsibility for the ways in which we do (and don't) influence behavior?

When I sit down to talk with clients in healthcare or financial services about issues like diabetes or financial management they are very clear about the value of behavior to their businesses. And eager for our help in understanding how consumer behavior is changing and how to support and influence that behavior. Guys like BJ Fogg, Dan Lockton, and Jess McMullan are writing very eloquently on the topic, and have been for some time. If you haven't read up on Behavioral Economics, Persuasive Technology, and Design with Intent, then you should give it a try.

I sense that much of discomfort has to do with our role in 'influencing' behavior. It goes against the sense that we should be somehow impartial as designers. That we should not impose our intent or manipulate outcomes. That the best designs allow people to address their own needs and fulfill their own goals free from intrusion or intervention from us, the designer. This is a very serious question: are you willing to trade some of this perceived impartiality in order to bring about meaningful change? If we, as a community, are not willing to invest some effort and yes, exert some influence, through the products and services we design, then how exactly will these changes come about?

 

You are familiar with Zen koans like "What is the sound of one hand clapping?". They are designed to open up consciousness with paradoxical or impossible questions. Well here's one: Can we have an economy that is not so dependent on rampant consumer spending?

After 9/11, Bush's solution was to exhort consumers to spend more as the way to propel ourselves out of the downturn. Today we are hearing similar advice.

Problem is, people are saving (or at least not spending, which I don't think is quite the same thing) rather than spending.

According to a report on radio show Marketplace, this is causing serious problems. On the heels of yesterday's announcement that Macy's is laying off thousands of workers:

Chalk the Macy's announcement up to a number out from the Commerce Department. Consumer spending fell for the sixth straight month in December. See, the financial crisis has convinced Americans to try something a little different -- it's called saving. But now this sudden attack of thrift is having dire economic consequences.

As Marketplace's Steve Henn tells us, the worst part is that it could be habit forming.

STEVE HENN: It's good to save some money. But when everyone starts saving at the same time, it can be an economic disaster. Goods pile up on store shelves, companies cut back on production and lay off workers. Then consumers pull back even more.

[...]

Greg McBride at Bankrate.com says the unemployment rate is only 7 percent, however . . .

GREG MCBRIDE: The other 93 percent think they might be next.

Economically secure consumers should be buying more. But McBride says fear is a powerful thing. It quickly changes economic behavior and might even break America's shopping habit.

I actually have great faith in the resiliency of the American shopping habit - despite downturns it has continued ever upward. But that's not necessarily a good thing. The past decade of consumer spending was unsustainable in two ways:

• We were spending beyond our means, on credit and using inflated house prices and equity
• We were (and continue) to buy at a rate unsustainable for the planet. The US is 5% of the world's population but consumers 25% of its resources. The domino effect is that China and others produce massive quantities of stuff for us in the US, which feeds their economies, their resource usage, their environmental impacts

Neither of these can be put back in place as we re-tool the economy. We need to figure out a way to have a large economy (nationally and globally) that does not rely on us buying more than we can afford, and making more than the planet can supply.

No answers here right this second. We need to all put our thinking caps on.

2009 will be a year of major uncertainty. The doom and gloom of the economic downturn, the deterioration of mass markets, the pervasiveness of the digital lifestyle, a host of explosive political conflicts, and the fragmentation of traditional societal institutions are causing anxiety and propel a new search for simplicity and non-economic value systems.

Consumption-driven wealth and status are being replaced by identity, belonging, and a strong desire to contribute and do something "meaningful" rather than just acquire things. Trust and reputation are no longer enablers for the exchange of goods, services, and information, they are replacing them. Values are the new value. Meaning is succeeding experience and customer satisfaction. "The job of leadership today is not just to make money. It's to make meaning," writes management consultant John Hagel. Out: Bottom-line-pragmatists and financial wizards. In: philosophers and ethicists.

This new cultural climate presents a historic opportunity for brands to transform themselves into arbiters of meaning. Becoming Chief Meaning Officers, business leaders must move beyond simply connecting products and customers with the goal to facilitate transactions - they must now create "meaning" through actions and interactions. When your brand is a vector, your base becomes a movement - that's what we learned from Barack Obama's campaign.

In 2009, we will see more examples of "meaningful marketing" and businesses generating value that goes beyond just meeting consumers' needs. This will imply several profound paradigm shifts: essence instead of luxury, free sharing instead of monetized scarcity, radical transparency instead of brand control, authenticity instead of image, empathy instead of focus groups, conversations instead of messaging, collaboration instead of dissemination. A "meaning surplus" will become imperative: Only brands that give more than they take will be able to create sustained brand loyalty.

A couple of recent articles dovetail nicely about how specifications, and what those specifications describe, influence how people make buying decisions.

The first is from a study looking at how choices between competing products are made, first based on subjective criteria, and then when specifications are introduced.

In an initial experiment, Christopher Hsee and colleagues asked 112 students to choose between one of two hypothetical cameras: one boasted better resolution, the other having superior vividness. Based on sample photos taken by the two cameras, but without detail on the precise resolution specs, most participants (74 percent) chose the camera that took more vivid photos. By contrast, when given the resolution specs as well as the sample photos, many more participants chose the camera with higher resolution.

In other words, after knowing the specifications more participants chose the worse-performing product. This explains why we see point-and-shoot cameras with gigantic megapixel counts, even though 4 megapixels to 5 megapixels is about all that a small camera (or to be precise, a small sensor) can handle well. The article goes on to describe some other nontech scenarios where the same situation played out.

Second is an article by Michael Schrage that discusses the fascinating history of some specifications, such as horsepower, that today we take for granted but which were invented to make it easier to sell new technologies. James Watt, the inventor of the steam engine, also invented the term horsepower that today we use to measure engines of all types.

The term horsepower represented clever rhetorical engineering by Watt and partner Matthew Boulton, whose business had prospered by charging mine owners only one-third of the cost savings achieved by replacing less-efficient Newcomen steam engines with their own.

Seeking to broaden their market, the collaborators thought brewmasters might find value in this new production technology. But 18th-century British breweries used horses--not steam--to power the turning of their mills' grindstones. So it behooved Boulton and Watt to recalculate their steam engines' appeal accordingly...

This notion of using innovative metrics--measures that gauge the unique value inherent in an innovation as a means of marketing it--goes well beyond the traditional approach of adding new "features" and "functionality" to attract consumers to products and services. By creating fresh language for the way people calibrate the worth and efficacy of a particular idea, innovative metrics have the potential to be so intrinsically compelling--or at least so creatively marketed--that they become, like horsepower, the overriding identity of a product or brand.

Note that Schrage's article may have limited free shelf-life, so take a look at it soon.

by Robert Fabricant, Executive Creative Director, frog design

"I had lunch with my kids at our local Middle Eastern restaurant in Park Slope, Brooklyn, yesterday. It has been there for a long time in a neighborhood that has exploded with cool cafes. The smell of warm pitas, fresh from the oven, practically brought my kids to tears. This place is getting more and more attractive to me these days. They provide good, cheap, fresh food – I can stuff the whole family for less than $30. But that's not all: at the end of the meal they always bring out some free honey semolina cake along with the check (they divide one standard portion into four little cubes for us). What a wonderful bonus...or maybe not. I would argue in this economy that cake is a critical element of their survival strategy. My neighborhood is flush with tasty restaurants competing for my shrinking budget. They all better be thinking of new ways to delight me.

In this economy the most pressing business imperative is customer loyalty. You better be thinking hard about how you are going to retain your customers over the next two years (even if you lose some real money doing it). I am paying close attention to the businesses that get this. The ones that are working extra hard to recognize regular visitors like me, even if I rarely buy (and never at full price). My presence in the store alone has rising business value these days.

This is the great challenge of the Google economy in a recession - we all know how much our eyeballs are worth. If you are willing to pay $$ for me to see a tiny advertisement alongside a set of search results - how much is my visit to your store worth? If I pay you for your products or services then you should pay me for my time and attention - right? And this doesn't even begin to recognize the business value you realize from me wearing your stuff or driving your car. Think about all the extra 'eyeballs' I am reaching. (For two interesting takes on this check out these posts by Rob Walker and Jan Chipchase). 

This is the paradox facing every business today and it will be a huge area of innovation over the next two years. You can read it in the paper every day. Here are two recent articles that ran in the New York Times Business section on the same day, one on Starbucks and the other on the hotel business and how they are adopting game technologies. As a design firm we are always looking for new ways to engage and inspire people. It starts with talking to your customers and observing what they do. Trying to identify fresh opportunities to delight them. Some of the best ideas may have little do with your core products and services.  Look at the auto industry: one of their biggest challenges is that I have NO reason to visit a dealership unless I want to buy a car.

Every business today should take a fresh look at the context surrounding their customer interactions. The goal is to identify the highest value, least expensive way to delight them. Here are some guidelines:

1. Make sure it is something that your customers encounter regularly (not something reserved for special occasions).
2. Make sure that it will be visible to others.
3. Make sure it is available to non-customers.

Businesses that survive will get very good at identifying the cheapest service that has the most impact in this area. But they won't stop there –  they will keep on innovating and trying new things to stay ahead in this game. These skills are not just crucial to their immediate survival but will position them to thrive in the future. The good news is that more and more customers are sharing their stories about these recession-era delights. So please send me yours. If I had any money left to start a new stock portfolio this is how I would do my research."

In May this year, frog design founder Hartmut Esslinger spoke at the German Trend Day in Hamburg. The Trend Day is an influential annual forum that gathers thought leaders from business, media, and academia to discuss emerging social and cultural trends. This year's theme was "Identity Management," and other speakers besides Hartmut included Richard Florida, Danny Choo, and David Bosshart.

The organizers have synthesized the research, interviews, and lectures of the two-day symposium into a manifesto that is worth reading:

http://www.slideshare.net/TrendBuero/identity-management-manifesto-presentation

The paper argues that today's "attention economy" will be succeeded by a "recognition economy," in which opportunities for design will continue to increase: "Compulsory self-responsibility will force consumers to optimize their self. This self will call for deliberate decisions and new orientation frames. Identity will become a management assignment. Recognition will become the new key quantity." The result is what the authors call "Egonomics - an economy geared to the own self." Egonomics comprises of the following pillars: Body: Healthstyle; Security: Authentification; Relationships: Connectivity; Recognition: Reputation; Self-actualization: Creativity.

Jonah Staw, co-founder and CEO of LittleMissMatched, heads-up a lifestyle brand that is based on "innovative and creative mixing and mismatching." LittleMissMatched launched in 2004 with a collection of mismatched socks sold in odd numbers to encourage girls of all ages to express themselves. The "nothing matches but anything goes" philosophy knocked people's socks off, and sales jumped from $5 million to $25 million in just three years. Today, the LittleMissMatched product line includes everything from socks, winterwear, and sleepwear to books, bedding, and furniture for mismatched mavens of all ages. LittleMissMatched products range in retail price from $5 to $1,200 and are available at specialty boutiques and department stores nationwide. The company recently announced $17.3 million in private equity funding, expanded distribution, a new flagship store in Manhattan, and a series of new products.

How do you define innovation?

Innovation is such a broad term. I was recently on a McKinsey panel discussing innovation, and we opened by going around the room. There were more than 25 chief strategy officers from major US corporations. The moderator asked what was the most innovative product, and 90% of the audience said the iPod. I said the Post-It Note. Why? It is so simple it's obvious. It has become a fixture on the physical American desktop. It is useful. It invented a new category...before there were note cards, stationary, thumb tacks and more. Now we have the Post-it. Innovations are simple, elegant solutions that make things better. Better doesn't necessarily mean more efficient...it could be more fun, easier to use, beautiful. You get the point.

What are the most important areas of innovation in your organization?

My company is 100% based on innovation. We created a company that was founded on the premise of selling three-packs of non-matching socks. Talk about a challenge -- we were completely changing the way people got dressed each morning. We set out to tell the world that it was okay to not match your socks and as such, you should buy them in a novel way. Our socks are uniquely paired to look great together. What we discovered is that our socks are something that are simply FUN. They are so fun that people what to tell their friends about them. Our customers lift their pant legs and say, "Hey check out my socks!," this is certainly innovation in the world of socks. Our challenge is to translate this innovation into other product categories so that our brand is cohesive. At LittleMissMatched we believe that simple product innovations make our success. People will talk about our products if we give them unique products that are easy to talk about. We have furniture that you can draw all over with a dry erase pen. Why have you ever done that before? We have bedding that flips and switches to make 192 combos in one bed set. For us, innovation is key to our long term success. The good news is that every product category in the world can be missmatchified.

What is your most successful innovation? How did you find it?

It depends on how we define success. I personally love our furniture. Maybe that is because I flew to China to help finalize its development. It was a brutally challenging trip so I am enamored with the end result. If we look at units sold, our socks win the award. If we look at dollars/SKU sold, then our bedding wins. Each of these innovations were found by breaking conventional norms to bring a true value proposition to our customer. Imagine a world where now one bed in a bag we sell gives you 192 combos when all of our competition only gives you one option. When we are at our best, we subvert the marketplace...in other words, we don't talk about thread count, we talk about combos. What this means is that we don't actually have competition. Why? Because of our version of innovation!

Which innovation "failure" did you learn the most from, and why?

I don't ever believe in failure. I believe in learnings. Our first sock package almost disintegrated in your hand, but it was a totally unique package...it failed functionally, but it led us to where we are now. We are only four years old as a company, so each step we take is a learning. Success never happens spontaneously. As they say, "practice makes perfect."

What lessons can you pass on to others from how your organization has changed to make itself more innovation driven?

The kind of people who are innovation seekers are what I call "yes to no" people. They are the type that says, "Hey that is a really great idea, but I think it would be even better if..." They are expansive thinkers. They are not the type that says, "Nope, that idea won't work because xy or z." We have worked as hard as we can to hire "yes to no" people. We want everyone to have an open mind, but ultimately, we want them to be filters/curators at the right time so that they can make the hard decisions that will grow our business. If I can pass one lesson on, it is to hire "yes-to-no" people!

In your opinion what are the biggest barriers and challenges that stand in the way of organizations becoming more innovative?

We are a small company with a short history. Our historical benchmarks are not relevant yet because we are rapidly growing. I think the biggest barriers are companies that say they want to be innovative but they don't truly plan for innovation. They look at their historical benchmarks instead of forward at the possibilities. At the McKinsey panel I described earlier, a chief strategy officer from a Fortune 500 company said, "20% of our new products are now required to be driven by innovation." I asked, "Is the company setting aside 20% of your time to develop innovation?" Of course the answer was no. Innovation doesn't just happen. Organizations must understand that they must change culturally and structurally to enable innovative thinking. Ultimately, I believe the executive office suite must also be populated by innovative thinkers or innovation doesn't have a chance of success.

Beyond your organization, who do you admire for risk-taking innovation and what do you think makes them successful?

I admire everyone trying to think differently. There are so many people innovating there isn't just one person to name. I think ultimately innovators are successful because of their passion for success. Remember Steve Jobs failed his first time at Apple and was fired by the board. A good idea isn't the key to success. It is execution, timing, market conditions and a whole lot more.

What innovation are you still waiting for?

If I had a list, I would be working on those innovations instead of what I am doing at LittleMissMatched! With all seriousness, I am very focused on building a brand based on creativity and innovation. I believe our brand has a broad enough foundation to explore the world!

Rob Walker, the author of the just-released "Buying in," is a marketing connoisseur, an expert in reading the cultural underpinnings of commerce. In his Consumed column for the New York Times Magazine, he examines how technology shapes consumer culture and vice versa. In tomorrow's piece he elaborates on the history of headphones, and how their role evolved in modern society, from the first Bose set to the Sony Walkman to the iPod earbuds.

With the miniaturization of devices, the public exposure of personal space increased. I remember that when I was 14, I came home from school, had lunch, and didn't wait a second to lie down on my bed, put my clunky Sennheiser headphones on, and listen to an album I had just bought. Thomas Dolby's "Aliens Ate My Buick" or Prince's "Sign of the Times." I closed my eyes and forgot the world around me. It was a moment of total immersion and uncompromising intimacy, both with the artist and myself. I wasn't ready to share the music with anyone else until I had fully experienced and vetted every single note through the immediacy of the headphone connection.

Looking back, headphones seem to have anticipated the era of performance-enhancing body extensions that we may be entering soon, but at the same time they now appear like a nostalgic relict of a time when the supply of attention among young consumers was still excessive. Having their social function shifted from providing excessive to expressive intimacy, headphones have become a status symbol for consumers who want to consume in between or parallel to other activities, and who want do that on their own terms -- in public, alone; in a perfect manifestation of what psychoanalyst Jacques Lacan coined "extimacy." The album has dissolved into 99-cent units on iTunes, and the headphone experience has been succeeded by portable soundtracks for permanent distraction.

Rob Walker will read from his new book "Buying In" at the frog Design Mind speaker series in New York on June 11.